A Libertarian's Dream [VIDEO]

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Business Insider: Consumer spending is another drag killing this economy

I was deliberating with a few friends the other day over a recent article published at The Blaze (including AlwaysRight of PfP) which analyzed the following statement from Senate Majority Leader Harry Reid (D-NV):

"Millionaire job creators are like unicorns. They’re impossible to find, and they don’t exist…Only a tiny fraction of people making more than a million dollars, probably less than one percent, are small business owners. And only a tiny fraction of that tiny fraction are traditional job creators…Most of these businesses are hedge fund managers or wealthy lawyers. They don’t do much hiring and they don’t need tax breaks."

People for Polity is of the belief that millionaires are vital for job growth...they just aren't currently creating jobs despite the Bush Tax Cuts.

The debate took a turn, where I began to imagine a world where a zero percent corporate tax rate worked...and then explained why it could only exist in theory (aka dreamland).  

More after the break...

The point (not necessarily Reid's point) is that they aren't giving anyone else an opportunity to do the same thing that they achieved; they aren't currently paying a fair wage.  Average pay increase in 2010 was $0.58 a week…hardly keeping up with inflation despite record productivity.  Meanwhile, CEO’s average pay increased to over $11 million.  This severely limits the economy, because seventy percent of GDP is consisted of consumer spending.

Losing the ability to spend limits money that goes right back into the economy.  Spending creates the demand and thus the jobs.  On the investment side, it severely inhibits consumer confidence.

If big business paid the wages that were due, they could have their zero percent tax rate.

Instead, they spend their money on lobbying and buying legislation.  94 percent of the 2010 elections were won by the candidate with the most money.  They are able to do this, because money and politics have gotten out of control.  This was further enhanced by the 2010 landmark Supreme Court decision of Citizens United v Federal Election Commission awarding corporations personhood. 

Doing so has allowed corporations to donate UNLIMITED amounts of UNDISCLOSED donations through legalized money laundering called super PACs.    

I personally believe that a fair wage is one that keeps up with inflation (most Americans don’t realize that -- every year they don’t receive a raise -- they are actually making less money than the year before) and one where we can have a strong middle class with the purchasing power to jumpstart a failed economy…a failed economy due to policy that ONLY benefits the rich and big business (because they elect our policy makers with their money).

If capitalism worked the way it should and wasn't controlled by greed, we could give business that zero percent tax rate.  But the corporate model doesn't allow for it; the model is driven by profit maximization and greed which means paying the worker as little as possible (aka exploiting them).

Do you honestly think that the worker doesn't deserve a wage that at least keeps up with inflation?  Do you honestly think the CEO deserves a bonus while their workers can't feed their families?

Think about what would happen if they spent the money they used to influence policy on their employees’ salaries and health benefits every year.  Suppose they decrease their salaries a little bit and did the same.  What do you think would happen with all that new found disposable income in the pockets of well over 150,000,000 people (because that’s at least how many jobs we would have if the decision-makers did this)?

Then imagine -- since workers are being paid well – the spike of revenues that would be drawn from consumer spending.  This would eliminate the need for a corporate tax rate (a Libertarian's dream).

But no; the corporation is built around the short-term, profit maximizing model.  Key concept:  short-term.

With a fair wage, Libertarians can achieve their dream, but corporate greed can't see past their short-term potential.  They can't vision their long-term potential, because the corporate model doesn't allow for it.  It can't allow for it, because another, even greedier, corporation will exploit them.

That is the dilemma of capitalism in an advanced state.  Until workers are being paid well, the economy – being driven by consumer spending – will continue to falter.

(H/T to Mike B. for the video.)